We were recently retained by a party who provided their services to a company who identified itself as a corporation, and we would later discover that it was not properly registered to carry on business.
To carry on business in Ontario in a name other than your own, a Business Name must be registered to do so, whether it be a sole proprietor or corporation carrying business as, or incorporating the name you plan to be carrying on business as.
Upon conducting our searches, we discovered that there were potentially five entities that could have been the Party who contracted with our client.
As the corporation name provided to our client was not registered, we named all five entities as Defendants in our Claim. The names were all too close to each other, even one business name being registered twice – one to a corporation and one to an individual, who happens to be the only director of that Corporation.
Counsel argued that the Corporation who shared a business name with an individual was the correct party, however, considering the closeness in names, we can’t be for certain, and they were unable to provide evidence of the correct party.
As all of the parties are affiliated with each other, the Court will determine who the proper Defendants are, all because of the failure to disclose the proper party in the first place.
This mess could have been avoided if the proper party identified itself at the commencement of the contract with our client. The conduct of these parties has caused confusion, potential exposure to personal liability and additional legal fees.
Always ensure you provide the correct information of the party you are conducting business on behalf of, or you can end up like those five entities who will now all have to defend.
Murray Brown, Licensed Paralegal